The Middlesex Retirement System board of trustees voted unanimously to transfer management of the system's assets to the $43 billion Massachusetts Pension Reserves Investment Management board, Boston, according to a statement by Thomas Gibson, chairman of the Billerica, Mass.-based Middlesex fund. The Middlesex system currently has assets of $700 million, said Ashley McCown, system spokeswoman.
"We believe that transferring management of these assets for a minimum of three years is in the best interest of our members and beneficiaries" and should result in a reduction in investment costs, according to the statement. However, the Middlesex fund will continue to oversee its 15% alternatives allocation for the time being, as "PRIM does not accept the transfer of those investments," Mr. Gibson said in his statement. He couldn't be reached for further comment.
At the end of 2005, the system's domestic equity managers were Atlanta Capital Management, INTECH, Fisher Investments, Fox Asset Management, Freedom Capital Management, Independence Investment, J. & W. Seligman and State Street Global Advisors. Acadian Asset Management, Lazard Asset Management, MFS Institutional Advisors and Wells Capital Management were its international equity managers. Domestic fixed-income managers were AFL-CIO Housing Investment Trust, Columbia Management Group, FMA, Hartford Investment Management and Income Research & Management; and Aberdeen was its international fixed-income manager.
PRIM Executive Director Michael Travaglini said Feb. 1 will be the date for moving the assets from those managers to PRIM's service providers.
The Middlesex fund had been roiled recently by allegations of improprieties. A report by the state's Office of the Inspector General raised questions about the bidding process for renovations done on the board's offices in 2002 and about expense reimbursement requests submitted by a board member who resigned earlier this month. According to one source familiar with the situation who declined to be identified, Monday's decision by Middlesex came just days before a scheduled meeting by the state's Public Employee Retirement Administration Commission at which PERAC was poised to order the local system to transfer management of its assets to PRIM. PERAC spokesman Michael J. DeVito was not immediately available for comment.